Cruising

Yet Another Cruise Ship Fire: Well, That’s Not Good


The fire-damaged exterior of Royal Caribbean’s Grandeur of the Seas cruise ship is seen while docked in Freeport, Grand Bahama Island

Photograph by Jenneva Russell/The Freeport News via AP Photo

The fire-damaged exterior of Royal Caribbean’s Grandeur of the Seas cruise ship is seen while docked in Freeport, Grand Bahama Island

So who’s up for a cruise? In the latest marketing debacle for the industry, Royal Caribbean Cruises (RCL) began flying passengers back to Baltimore today after a fire aboard its Grandeur of the Seas early on Monday caused the company to cancel the remainder of the cruise, as well as the one scheduled for May 31.

It’s been a choppy few months for cruise ship operators. Memorial University of Newfoundland professor Ross Klein, who studies the industry and is the publisher of CruiseJunkie.com, collected reports of 31 incidents on cruise ships in the first three months of 2013, finding more ships run aground and more propulsion problems than in all of 2012. (To be fair, there were far fewer collisions; Klein’s data are self-reported by cruisers.) To counter the images of passengers stranded on a powerless ship, the submerged Costa Concordia, and other disaster-at-sea photos, the industry has been working to stress that major incidents like these remain rare.

“Regular cruisers know that incidents such as this are unusual for the cruise industry and historically have not changed their booking patterns following an incident,” David Peikin, a spokesman for industry trade group Cruise Lines International Association, wrote in an e-mail. He noted that the industry operates roughly 300 ships, usually once per week, for 15,600 cruises each year, and that this year cruise lines are expecting some 21 million passengers, up about 700,000 from last year.

Most of those people are going to be just fine. The 97 incidents Klein tallied in 2012 make up about 0.6 percent of that year’s cruises: You’ve got a better chance of getting audited by the IRS. Still, the social media and the dramatic, made-for-TV images have taken a toll on the industry’s reputation and finances.

Carnival (CCL), the largest cruise ship operator, on May 20 cut its profit forecast for the second half of this year because of price cuts implemented after the Carnival Triumph had a fire and lost engine power in February. In late April, Royal Caribbean affirmed its projections for the year but noted “a modest disruption to Caribbean demand which the company attributes to adverse industry media coverage.”

On May 22 the industry announced a new “passenger bill of rights” covering the 26 operators that sell cruises in North America. Among the measures is the promise of a full refund for cruises canceled by a mechanical failure or partial refunds for cruises curtailed by such problems. The cruise lines also promise to pay for hotel accommodations if a ship stops at an unscheduled port because of mechanical problems. The measure was adopted following criticism in March from members of Congress responding to the Triumph incident, including whether Carnival should reimburse the U.S. Coast Guard and Navy for the efforts made regarding the ship.

In the latest incident, the Grandeur of the Seas’ crew extinguished the blaze in about two hours in an aft storage area that spread to a second deck. The ship did not lose power and was directed to Freeport, on the island of Grand Bahama, where the Coast Guard and National Transportation Safety Board are investigating, along with Bahamian officials. Royal Caribbean offered a full refund and planned 11 charter flights to return the 2,224 cruisers to Baltimore.

Bachman is an associate editor for Businessweek.com.

The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • RCL
    (Royal Caribbean Cruises Ltd)
    • $82.27 USD
    • -0.09
    • -0.11%
  • CCL
    (Carnival Corp)
    • $45.78 USD
    • 0.39
    • 0.85%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus